Mumbai, Dec 12, 2024 - With India's economy facing both global challenges and local initiatives, recent insights from notable figures shed light on the nation’s growth potential. Mark Mobius, renowned global investor and Chairman of Mobius Emerging Opportunities Fund, has expressed confidence in India's economic resilience. Speaking during an investor webinar organized by PL Capital-Prabhudas Lilladher, he noted the significant achievements of the Indian economy amid inflationary pressures and highlighted the promising growth forecast of 6-7 percent for the country.
Mobius remarked, "On a macro front, 6-7 percent growth rate in India is good compared to the global average." His analysis points out the nation's 5.4 percent growth recorded in the second quarter of FY25, which is impressive for such a large economy, currently valued at approximately $4 trillion.
He elaborated on the positive impacts of the "Make in India" initiative, recognizing government efforts to bolster local manufacturing. Mobius noted, "The biggest advantage of local manufacturing is India's vast domestic market, which supports self-consumption of goods." Enhanced infrastructure development has also played a pivotal role, according to the investor, who praised the government's intent to modernize India’s infrastructure and improve governance, stating, "Despite political challenges, PM Modi’s administration remains focused on reducing inefficiencies and enhancing governance. The real tightrope walk lies in balancing populist measures with long-term structural reforms."
Mobius highlighted several sectors poised for significant growth, including defense manufacturing, semiconductors, and digital public infrastructure. He suggested opportunities also lie within energy, urbanization, and tourism, signifying dynamic shifts favoring India's economic development.
Meanwhile, Jaggi Vasudev, popularly known as Sadhguru, expressed his discontent with the disturbances witnessed during parliamentary sessions, particularly concerning discussions on wealth-creating sectors. On December 12, during the Winter session of Parliament, disruptions led to multiple adjournments, prompting Sadhguru to share his thoughts via social media. He said, "It is disheartening to observe disruptions, especially as we aspire to be a beacon of democracy." Emphasizing the need for political stability, he warned against letting business issues become political footballs, advocating for lawful resolution of any discrepancies.
The current tensions within Parliament are reflected in the actions of the Congress-led opposition, which has raised concerns about favoritism toward specific business magnates, accusing the ruling NDA of corruption. These tensions peaked when the opposition moved a no-confidence motion against Rajya Sabha chairman Jagdeep Dhankhar, citing his partisan behavior and challenging his leadership within the House.
Internal conflicts within Parliament do not solely detract from governance; they also raise questions about the broader economic narrative. The recent DSP Netra report highlights the declining share of top 50 stocks within India’s total market capitalization, indicating new investment dynamics. The report indicates this situation presents rare opportunities for investors as the share of these traditional large-cap stocks reaches historical lows. It states, "While large caps remain relatively attractive, the current market environment necessitates caution amid volatility."
According to the report, investor focus should shift to identifying growth potential among smaller companies. The report also reveals the consistency of Indian companies, with many reflecting strong long-term returns on equity (ROE) standing out. Approximately one-third of Indian firms have maintained ROE exceeding 20 percent, matching global leaders like the United States.
Sahil Kapoor, Head of Products and Market Strategist at DSP Mutual Fund, attested to India’s compelling fundamentals, which, coupled with the geopolitical stability slowly reappearing due to resolving conflicts like the Russia-Ukraine war, might garner greater foreign investments. Kapoor stated, "India's fundamentals indicate the potential for long-term growth; hence, adopting a conservative investment approach can be strategic here, especially against unpredictable markets."">
Supporting these indications, the Indian government reported substantial foreign direct investment (FDI) inflows, with 69 percent of the $1 trillion accumulated over the past decade attributed to proactive domestic policies. This achievement reflects both domestic consumer confidence and international investor interest, solidifying India’s place as one of the most favorable markets to engage with right now.
Looking forward, as Sadhguru's plea for political decorum resonates with many, the compounded impact of the economic indices, investor sentiments, and governmental dynamics underlies the unsolved questions on continuous growth and prosperity, ensuring India remains on the radar not just for local investors, but for the global capital markets eyeing annual returns.
